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Average Per-Bit Delivery Cost, or APBDC, is the
Average Per-Bit Delivery Cost divides the cost of however many bits were actually modulated across a network or component of a network over a period of time by the total operational and amortized capital expenses associated with the network or component over the same time-period, to produce an average cost for the delivery of each transmitted bit of data. This is contrasted principally with flat-rate and 95th percentile functions, which are typically used for billing customers rather than cost accounting. In typical use, APBDCs of individual links or components of an operating network are compared with the APBDC of the whole, in order to evaluate the efficiency of the components and to track improvements in efficiency.
High APBDC may reflect either a high cost or a low utilization, either of which is detrimental to the price/performance of the network as a whole, and indicates an area that needs attention and improvement. Besides reduction in costs of existing network components, use of already-amortized or less expensive components, and transmission of greater volumes of traffic, fundamental or "revolutionary" changes to the topology of a network, such as the substitution of peering-derived bandwidth for purchased transit, often have substantial impacts on a network's APBDC.
The use of Internet Exchange Points (IXes or IXPs) to disintermediate ISP networks from sources of
cost accounting
Cost accounting is defined as "a systematic set of procedures for recording and reporting measurements of the cost of manufacturing goods and performing services in the aggregate and in detail. It includes methods for recognizing, classifying, al ...
method by which Internet Service Providers (ISPs) calculate their cost of goods sold
Cost of goods sold (COGS) is the carrying value of goods sold during a particular period.
Costs are associated with particular goods using one of the several formulas, including specific identification, first-in first-out (FIFO), or average cost. ...
.
Concept
Average Per-Bit Delivery Cost divides the cost of however many bits were actually modulated across a network or component of a network over a period of time by the total operational and amortized capital expenses associated with the network or component over the same time-period, to produce an average cost for the delivery of each transmitted bit of data. This is contrasted principally with flat-rate and 95th percentile functions, which are typically used for billing customers rather than cost accounting. In typical use, APBDCs of individual links or components of an operating network are compared with the APBDC of the whole, in order to evaluate the efficiency of the components and to track improvements in efficiency.
High APBDC may reflect either a high cost or a low utilization, either of which is detrimental to the price/performance of the network as a whole, and indicates an area that needs attention and improvement. Besides reduction in costs of existing network components, use of already-amortized or less expensive components, and transmission of greater volumes of traffic, fundamental or "revolutionary" changes to the topology of a network, such as the substitution of peering-derived bandwidth for purchased transit, often have substantial impacts on a network's APBDC.
The use of Internet Exchange Points (IXes or IXPs) to disintermediate ISP networks from sources of Internet bandwidth
In computing, bandwidth is the maximum rate of data transfer across a given path. Bandwidth may be characterized as network bandwidth, data bandwidth, or digital bandwidth.
This definition of ''bandwidth'' is in contrast to the field of signal p ...
is a typical mechanism by which ISPs reduce their APBDC. Properly-sourced, bandwidth procured directly from its point of production in an IXP has a lower APBDC than bandwidth procured indirectly through an intermediary transit
Transit may refer to:
Arts and entertainment Film
* ''Transit'' (1979 film), a 1979 Israeli film
* ''Transit'' (2005 film), a film produced by MTV and Staying-Alive about four people in countries in the world
* ''Transit'' (2006 film), a 2006 ...
provider.
Average Per-Bit Delivery Cost was first described under that name by Bill Woodcock
Bill Woodcock (born August 16, 1971 in San Francisco, California, United States) is the executive director of Packet Clearing House, the international organization responsible for providing operational support and security to critical Internet ...
in 2004, but built upon his previous work on Internet cost calculation, some of which was in collaboration with Andrew Odlyzko
Andrew Michael Odlyzko (Andrzej Odłyżko) (born 23 July 1949) is a Polish-American mathematician and a former head of the University of Minnesota's Digital Technology Center and of the Minnesota Supercomputing Institute. He began his career in ...
in the 1990s and with Zhi-Li Zhang and others in the early 2000s.
References
{{DEFAULTSORT:Average Per-Bit Delivery Cost Telecommunications economics Management accounting Data transmission